"We see that there's a gap where people want to watch Indonesian high-quality content, but where the only choice to see it is to go to the cinema," Gojek Entertainment Group Chief Executive Edy Sulistyo told Reuters in an interview.

"With 'Goplay', we are here to fill the gap and bridge the millions of Indonesian mobile viewers to the Indonesian film industry," he added, referring to the name of the new video-streaming platform.

Having evolved from a ride-hailing service founded in 2010 to providing a one-stop app through which users can make online payments and order food and services such as massages, Gojek is now nursing ambitions for a larger share of the Southeast Asian market, where Singapore-based rival Grab currently dominates ride-sharing.

The launch of its Indonesian video platform sees the start-up, which is valued at $10 billion based on its last round of fundraising in July, take on U.S streaming giant Netflix, Malaysian upstart Iflix, and Singaporean firm and Grab partner HOOQ in a fight for eyeballs in the country's fast-growing video streaming market.

"Mobile penetration in Indonesia has reached 54 percent, which is roughly 130-140 million people, so the potential is very big," Sulistyo said.

The expansion into video streaming comes on the heels of Gojek launching in September a gaming platform in Indonesia, in collaboration with strategic investors Google and Chinese internet giant Tencent, that offers gaming credit top-ups and e-sports tips.

Gojek also invested in a digital media start-up late last year as it strengthens its expansion into online content.

Indonesia's internet economy is forecast to grow to $100 billion by 2025, according to a 2018 study by Google and Singapore state investor Temasek, as more consumers use smartphones to go online.

INDONESIAN CONTENT

Subscriptions to the 'GoPlay' mobile-only video streaming platform will start at 89,000 rupiah a month ($6).

While some of its rivals, including Netflix, have produced Indonesian content, Sulistyo believes the breadth and "quality" of the Indonesian movies and TV series Gojek is offering will give it the edge, including a 3-5 minutes short films section.

Gojek has secured the streaming rights to hundreds of recent Indonesian films and shows.

It launched its own in-house studio in 2018 in anticipation of the platform, co-financing at least nine different original Indonesian movies and series, including Indonesia's 2019 Academy Awards nominee "Memories of My Body".

This was done in part through partnerships with VICE's Indonesia unit and film production company Visinema.

The executive declined to say how big an overall budget Gojek has allocated to the initiative, but added the company was working with a wide range of production houses for its programming, which would be recalibrated according to viewers' responses.

While focused on Indonesian content, Sulistyo said Gojek had also inked some tie-ups with foreign production companies for partial access to their libraries, including with South Korean entertainment powerhouses CJ E&M and SM Entertainment for TV shows.

"We want to spend enough to satisfy demand," he said, noting there were no short-term plans to expand GoPlay beyond Indonesia.

(Reporting by Fanny Potkin; Editing by Alex Richardson)

By Fanny Potkin